As Canada heads into 2015, analysts are trying to forecast what lies ahead for the world’s 11th biggest economy. Below we take a look at recent economic performance markers that could give us a fair indication on what to expect in 2015.

Free trade agreements

Canada has now concluded free trade agreements with more than half of the world’s economy, with a combined GDP of $41 trillion, giving a major boost to Canadian producers and manufacturers looking to compete globally.

The year 2014 saw Canada signing major free trade agreements with the European Union as well as South Korea. The government now plans to hold discussions with India, Japan and the Trans-Pacific Partnership group consisting of 12 nations.

The Canadian government also aims to reverse the negative export trend it has been experiencing, with the country’s share in global exports having declined from 4.5% to 2.5% over the last 15 years.

House pricing

In February 2014, the average sale price of a detached Vancouver house reached a record high of $1,361,023. The average price of housing all across Canada in 2014 went up by 6.8%, as opposed to a 5.2% increase in 2013.

The main drivers behind the rising real estate prices are the low borrowing costs combined with a scarcity of small single-family houses in certain markets like Toronto.

According to the central bank, the price of Canadian houses was overvalued by as much as 30%. Real estate forecasters however believe that the price rise will level off in the near future.

Interest rates

Since 2010, the central bank of Canada has stuck to its 1% overnight interest rate which influences major economic drivers like mortgages and loans. The interest rate has been pegged at 1% for four years now in what is seen as an attempt to drive up the performance of the economy, and it is likely that the interest rate will remain the same in 2015 too.

Number of factory workers

The total number of factory workers in Canada in June last year was recorded at 1,710,900, the lowest since 1976. The decline has severely impeded Canada’s manufacturing abilities in a highly competitive international market.

However there was a notable improvement in labor numbers up until November last year, with reports indicating that about 41,000 factory jobs had been created between June and November 2014.

However, critics have argued that despite growing demand, Canadian industry does not quite have the capacity to manufacture unless significant investment is made. Canada has undergone severe loss of exporting potential and this has destroyed the “backbone of the economy” which would need a longer rebuilding phase to recover, says Stephen Poloz, Governor at the Bank of Canada.

A study by central bank revealed that Canadian manufacturers are expanding their production abroad instead of at home.

Employment

Even with unemployment rate hitting a six-year low of 6.6% in 2014, Canada’s labor markets will see some improvement in 2015. According to Bank of Canada Governor Stephen Poloz, there are 200,000 young people in the country who want to work or work more.

Poloz has urged Canada’s youth to take whatever work they could get regardless of whether it pays anything or not. His statement evoked much criticism from labor unions and youth groups, who believe that the Canadian government should work on improving paid employment in the country.

Currency

In January last year, the Canadian currency reached a high of $US 0.94 but by the end of 2014, it dropped to US$ 0.86. The slide was caused due to the reluctance of the Bank of Canada in raising interest rates as well as the reduction in global commodity prices.

The lower value of Canadian dollar however helps manufacturing in regions like Ontario. But since it increases the price of imported commodities and international travel, it tends to lower consumer confidence, which hit an 18-month low at the end of 2014.

Oil price

The closing price of West Texas Intermediate crude oil at the end of 2014 was $53.71, down by a steep 46% over the course of last year.

As oil is Canada’s biggest export, the impact on the Canadian economy is expected to be severe, with the decline already leading several producers to scale back on investments. Finance minister Joe Oliver has resorted to trimming the government’s revenue outlook in November in order to account for the price fall and has also cut by half the cumulative surplus projections. Should the oil price fail to recover or even continue to fall, the impact will be reflected in the government’s budget in the coming months.

Finance Ministry

Canada’s former finance minister Jim Flaherty served a total of 2,962 days before he stepped down in March last year. His long term in the ministry is indicative of his success, which included reducing Canada’s federal tax revenue as a percentage of GDP to pre-World War 2 levels, thus helping the economy stay afloat even during the 2008 global recession.

During Flaherty’s tenure as finance minister, Canada’s economy outperformed the Group of Seven average in all but one of the years he held office.

The current finance minister Joe Oliver, who was a former investment banker, will try to prove his caliber by helping Canada reach a surplus this year.

Foreign acquisitions

In 2014, Canada saw foreign acquisitions worth $69.6 billion, a figure that was more than double of 2013. The main acquisition deals of 2014 included the purchase of AltaLink by a unit of Warren Buffet’s Berkshire Hathaway Inc., a $13 billion purchase of Talisman Energy by Repsol SA and Burger King Worldwide Inc.’s purchase of Tim Hortons for $13.2 billion, including debt.

These foreign acquisitions marked a reversal of the trend in 2013 when investment in Canada slowed down due to Canadian Prime Minister’s decision to restrict China’s investment in the oil sector.

Quebec’s Parti Quebecois

In the provincial elections of April 2014, Quebec’s separatist party Parti Quebecois received just 25% of the votes, which was its worst performance in the past 44 years.

The result came despite popular predictions of a majority win for the party in the French-speaking province. Because of this result, the possibility of another independence referendum has been placed under wraps for some time at least, allaying fears of any potential investors.

A new study has confirmed what many experts have long believed – that migration is good for a country’s economic prospects.

The study, which was summarized for a post on the World Economic Forum website, looked at how immigration effects population and income for the receiving country as well as how emigration effects population and the economy (through funds sent back home to the native country).

On the whole, most countries with high immigration levels fared better economically than those with high emigration and not a lot of immigration. The study also found that overall migration had a positive effect because the immigrant is able to contribute to both countries (through productivity and taxes in the host country and by sending funds back home to relatives or friends).

The authors point out that their findings fit with theories long held by economists. The benefits make sense, as migrants usually are motivated to move for economic reasons.

The findings come at an interesting time as more and more global leaders have been trying to balance an increased competition for skilled workers with an increasing backlash at home against more open immigration policies. The study could certainly help convince concerned constituents that immigration is, indeed, beneficial in the long term.